Charity Seeks To Transfer Money Frozen By Treasury

By STEPHANIE STROM

Published: April 15, 2004

The Holy Land Foundation for Relief and Development, one of three charities whose assets have been frozen because they are suspected of funneling donations to terrorist organizations, has asked the Treasury Department for permission to transfer some of its charitable assets to another nonprofit organization.

If the department approves, the foundation will give $50,000 to the Palestine Children's Relief Fund, which works to bring medical services to needy children in the Mideast.

''This is the donors' money and it should go where donors wanted it to go, to good, charitable causes,'' said Salam Al-Marayati, executive director of the Muslim Public Affairs Council, which has been lobbying for the release of the frozen money to other charities.

Millions of dollars of the money frozen by the government has been spent covering legal fees, which has raised concerns in Congress as well as among the donors.

The Treasury Department will not disclose how much money was impounded. The holy land organization, which was the largest Muslim charity in the country, is believed to have had a little more than $6 million in assets.

Lawyers for the two other charities whose assets were impounded, the Global Relief Foundation and the Benevolence International Foundation, have said that legal bills have eaten up virtually all of their money.

There is no precedent for transferring money from one charity to another, but Juan C. Zarate, deputy assistant treasury secretary for terrorist financing, has said he is favorably disposed toward the idea in spite of legal obstacles.

Mr. Al-Marayati said he hoped the transfer would be the first of many by the holy land organization, which operated from Richardson, Tex.

John Boyd, a lawyer for the charity, did not return calls to his office.

Steve Sosebee, president and chief executive of the Palestine Children's Relief Fund, said that if the charity received the money, it would use it to provide immediate relief services like the program it is running in Hebron to deliver powdered milk to malnourished mothers and children.

This year, the fund underwrote 15 medical missions in which doctors from Italy, New Zealand, the United States and elsewhere have performed plastic surgery on burn victims and repaired cleft lips and palates.

It works to match children to medical services around the globe, covering travel expenses, arranging lodging and handling paperwork, among other logistical services.

Mr. Sosebee said the money would be particularly helpful now. The fund-raising environment for charities over all has been difficult over the last three years, and the relief fund has been hit by several other negative trends as well.

The Palestine Children's Relief Fund is an interfaith organization. Mr. Sosebee, its founder, was raised as a Roman Catholic but says he is now agnostic. The fund's name has hurt it somewhat since the terrorist attacks on the World Trade Center and the Pentagon, he said. Revenues had steadily climbed to a peak of $895,000 in 2001 but dropped 33 percent to $598,000 in 2002, according to the organization's tax returns.

Muslims, whose religious tenets oblige them to donate 2.5 percent of their annual income to charity, have been wary of making donations that might attract the attention of the Federal Bureau of Investigation and other authorities.

Mr. Sosebee said the fund had been hard hit by a steep drop in contributions in the Persian Gulf states and other Middle Eastern countries and to a lesser extent among its patrons in the United States.

The organization is also concerned that the NBC movie ''Homeland Security,'' which made its debut last Sunday, is going to have a negative effect on its revenues. In one scene, an investigator asks a professor who is suspected of having links to Al Qaeda about his support for ''the Palestinian Children's Relief Fund.''

He responds that ''P.C.R.F. is a front for Islamic Jihad,'' a terrorist organization, and vehemently insists that he does not support that organization's policies or tactics.

Mr. Sosebee said he had received many phone calls and e-mail messages after the program was broadcast, asking how the Palestine Children's Relief Fund spent its money.

''This is starting to build up into a big deal because all the organizations working in the Middle East are feeling like we're being attacked,'' he said. ''I don't have any politics or any political agenda, so I shouldn't have to feel guilty about anything.''